2006 Annual Results

23 February 2007

STRONG EARNINGS GROWTH IN 2006,
WITH EARNINGS PER SHARE UP 23%
GOOD FOURTH QUARTER
FAVORABLE TRENDS FOR 2007

In order to reflect the divestment underway of our Roofing business, and in compliance with IFRS principles, 2006 full year operating results are presented excluding Roofing. The net contribution of this activity to the different lines in the 2006 financial statement is presented on a specific line. Consequently, 2005 figures have been restated.

The Board of Directors of Lafarge, chaired by Bertrand Collomb, met on February 22 2007 to approve the accounts for the year ending December 31 2006.

STRONG INCREASE IN 2006 KEY FIGURES IN ALL ACTIVITIES AND ALL FOUR QUARTERS

Sales: +17%

Organic growth: +14%

Current operating income: +23%

Improvement in Group operating margin, up at 16.4% compared to 15.5% in 2005

Net income Group share: +25%

Earnings per share +23% to €7.86

Dividend per share +18% to €3.00 subject to AGM approval

Improvement in Return on capital employed to 9.4%, compared to 8.5% at the end of 2005

2006 GROUP HIGHLIGHTS

Launch of the Excellence 2008 strategic plan, to ensure Lafarge long-term industry leadership. Far-reaching transformation of the Group’s organization, cost reduction program of €340 million by 2008 (excluding Roofing).

Launch of the Health & Safety roadmap.

Two major strategic transactions: Buy-out of the minority interests in Lafarge North America and divestment of the Roofing activity, while maintaining a significant 35% stake in the new entity (this operation will be finalized during the first quarter of 2007).

Acceleration of our internal development program to take full advantage of the Group’s potential.

BRUNO LAFONT, CHIEF EXECUTIVE OFFICER OF LAFARGE, DECLARED:

"2006 was a year of transformation for Lafarge, with the Lafarge North America minority buy-out, the Roofing divestment and the rapid roll-out of our strategic plan Excellence 2008. We saw a strong increase in our results, with positive trends in our markets, strong organic growth and tighter cost controls.
Favorable trends continued in the fourth quarter, and our results should continue to improve in 2007.
I am therefore particularly confident for the future, and we should exceed the objectives we announced in June 2006 of an average annual increase in earnings per share of 10% between 2005 and 2008 and an improvement in ROCE to 10% by 2008.
We propose to increase our dividend per share significantly, by 18% to 3€, and we will use our share buy-back authorization to launch a 500m EUR buy-back program in 2007."

FOURTH QUARTER

In the fourth quarter, favorable pricing and volume trends continued overall.

Operating results continued to improve in the fourth quarter in all our activities, despite particularly high comparatives. Current operating income was up 11% on a like-for-like basis, with a particularly strong increase in our Aggregates & Concrete business, where current operating income was up 30%.

In the fourth quarter, net income group share benefited from the positive effect of the LNA minorities buy-out and from the improvement in operating profits. As expected, it is down 15%, impacted by the return to a more normal tax rate of 31% after an exceptionally low rate in Q4 2005. Excluding the tax effect, it improved by 23%.

The press release(pdf, 56.23 KB)

The management report as of December 31, 2006(pdf, 529.09 KB)

The presentation slides for the press(pdf, 1013.01 KB)

The presentation slides for the analysts(pdf, 1.16 MB)

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LafargeHolcim operates four businesses segments: Cement, Aggregates, Ready-Mix Concrete and Solutions & Products, which includes precast concrete, asphalt, mortar and building solutions. LafargeHolcim's broad portfolio is focused on solving the toughest challenges that masons, builders, architects and engineers face, from urbanization to population growth and the demand for affordable housing. Headquartered in Switzerland, LafargeHolcim holds leading positions in all regions across the globe. It employs approximately 80,000 employees in around 80 countries and has a portfolio that is equally balanced between developing and mature markets.